Gold Market Update

Here are some important facts about gold. The long-term uptrend in force since
the start of this bull market remains intact. The price is currently in the
late stages of a symmetrical triangle trading range that started to form following
the peak early in December. Symmetrical triangles can break either way, but
other factors normally provide clues as to the probable direction of breakout.
The fact that this triangle is forming above and within a zone of important
support strongly suggests that an upside breakout will eventuate, particularly
as the long-term uptrend remains intact and moving averages are now in bullish
alignment. The previous major reaction/consolidation, which occurred during
the first half of last year similarly ended at a zone of strong support exactly
at the long-term uptrend line.

The 4-year chart shows the entire bull market to date. The importance of the
long-term uptrend shown is amply demonstrated by the fact that the price has
rallied from it on 5 distinct occasions. THIS UPTREND CHANNEL IS VERY IMPORTANT
- GOLD IS AN AUTOMATIC BUY WHENEVER IT APPROACHES THE LOWER BOUNDARY OF THIS
CHANNEL - AND TRADERS WILL WANT TO HAVE A DEFENSIVE STRATEGY IN PLACE IN THE
EVENT THAT THIS CHANNEL FAILS (which is not expected). As it is still close
to the lower boundary of the channel, having just successfully tested support
there and broken higher, it is a buy at the current price for any interested
parties. Silver also looks positive at this juncture, although silver is in
the late stages of a much larger symmetrical triangle formation, with correspondingly
big implications. Precious metals stocks, many of which have been severely
trampled down during this latest gold consolidation, are also an across-the-board
buy - sentiment in this sector stinks, which is exactly what you want to see
ahead of a substantial rally. Many small exploration stocks in particular are
showing signs of completing long low bases.

A 2-year chart is also shown in order that we can see the symmetrical triangle
formation in detail, and the underlying support provided by last years price
action. This strong support, coupled with the long-term uptrend support shown
on the 4-year chart, and augmented by the bullishly aligned moving averages,
powerfully suggests that a vigorous new uptrend, taking the price to new highs,
is in prospect.

The 6-month dollar chart shows how the dollar has started to wilt, as predicted
in the last update, beneath heavy resistance in the 85.50 area, and appears
to be starting a new intermediate downtrend, which fits with the interpretation
of the gold chart.

The 4-year dollar chart shows the overriding long-term downtrend. The intermediate
downtrend late last year appears to have halted at an inner downtrend channel
line that can be seen to correspond with the one on the 4-year gold chart.

The above represents the opinion and analysis of Mr. Maund,
based on data available to him, at the time of writing. Mr. Maunds opinions
are his own, and are not a recommendation or an offer to buy or sell securities.
No responsibility can be accepted for losses that may result as a consequence
of trading on the basis of this analysis.

Mr. Maund is an independent analyst who receives no compensation
of any kind from any groups, individuals or corporations mentioned in his reports.
As trading and investing in any financial markets may involve serious risk
of loss, Mr. Maund recommends that you consult with a qualified investment
advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction
and do your own due diligence and research when making any kind of a transaction
with financial ramifications.